My earlier post got me thinking about why, in 2007, the average bitrate for a video file delivered via streaming media is still encoded in 300Kbps? Is it purely because content owners don’t want to pay more money to delivery their videos at higher bitrates? Or is the trade off between quality and price acceptable for the current content business models we have today?

Over the past 10 years, we saw the bitrates increase from 20Kbps to 37Kbps, to 80Kbps, to 100Kbps and then to 300Kbps. Yes, there is some content available in 500Kbps and 750Kbps but still very, very little. We’ve been at 300Kbps for years now and I don’t yet see a shift in that bitrate being bumped up to say 500Kbps. Why is that? Are you content owners satisfied with the quality you get now and the cost to deliver that content? Are you happy with the trade off of lower quality content delivered for a cheaper price? If that’s the case, I think that’s ok. Some trade-offs are acceptable. But it has me thinking about what is stopping the increase of what we classify today as broadband video content?

I don’t think it is a lack of capacity on the networks of the CDNs who are delivering most of this content and I don’t see the viewers having any computer or end-mile limitations stopping them from getting a 500Kbps stream today. So what is stopping the adoption of high bitrate content?

I’d love to get some thoughts and feedback to this question.

I keep reading articles and press releases that use the term "bandwidth bottleneck" and talk to how the lack of available bandwidth is somehow the factor that is stopping the adoption of online video. What are these companies talking about? There are more broadband customers than ever before, the average DSL or cable modem is between 3-6MB and there are plenty of folks like me who have 20MB or those who are accessing the Internet via their corporate LAN. Bandwidth is NOT the problem.

Yesterday, IBM put out a release about a new prototype optical receiver chipset that is at least 8x faster at 160 gigabits of data/second, than currently available optical components. I think that’s great and I’m sure down the road it will become useful. But instead of stopping there, IBM had to then use the analogy of "That’s fast enough to download a high definition feature-length film in one second, versus at least 30 minutes using the fastest available technology today." No one is even downloading movies in any volume in non-HD today, let alone HD. And if they were, it would take the average person about 3 hours to download a non-HD movie.

It’s the business models behind the creation and consumption of content that the industry is working on and at this point in time we assume nearly all of our viewers have a broadband connection capable of them getting at least a 300Kbps stream. When was the last time you even saw content, other than audio, encoded below 100Kbps? Yes, we do have some bottlenecks in this industry, but nearly all of them are ones pertaining to business and consumption, not bandwidth.

Last week, a judge ruled against Cablevision in a suit filed by Hollywood studios and broadcasters who claimed that Cablevision’s new network based digital video recording device would have broken copyright laws.

Last year, Cablevision announced plans to network digital video recorders which would have allowed cable customers to be able to record and playback shows through a regular cable box without the need to have a DVR cable box with a hard drive.

In the suit, Twentieth Century Fox, Paramount Pictures, CNN and Turner Broadcasting System claimed that Cablevision’s service would amount to an additional re-broadcast of their programs which they have not given permission for. Cablevision argued that since the the customer was in control of the recording and playback of the programs, and not Cablevision, that the devices were compliant.

Once again, the movie studios refuse to let customers decide how and when they consume content. When are these content companies going to realize that if they don’t give customers control, they won’t grow their business? The major studios keep complaining about the decline of DVD sales, the decline of theater ticket sales and the problem of illegal movie downloads, yet their own greed is keeping them from growing their business since they refuse to listen to what consumers want. Content isn’t king, the customer is king.

Why can’t MSNBC.com get it’s video to work for Mac users with the Firefox or Safari browsers? Everyone says that using Flash solves the cross-platform issue but it doesn’t when a site like MSNBC.com who is using Flash, still doesn’t support Mac users. I am trying to watch the briefing on the pet food recall and had to leave the MSNBC.com site to go watch it with CNN’s pipeline service. I like MSNBC.com for getting my news each day but it’s dumb that they make Mac users leave their site and force them to go to a competitors news site to get video.

There is no excuse for MSNBC.com not to be able to support Mac users when the other news sites out there have been supporting them for years. Wake up MSNBC! You are losing eyeballs like mine when I can’t get the news I want from your site. Do I really need to tell you how people are getting news on the web today?

Update: I forgot to mention. In addition to the above, MSNBC makes you sit through a video advertisement BEFORE they tell you that you can’t see the video you are after. So while they know the browser is not supported, they don’t tell you that till after you have watched a video ad, which of course seems to work just fine in the browser.

Limelight Networks has filed for an IPO on the NASDAQ global market under the ticker symbol LLNW. The filing, which was made public Thursday by the SEC, says Limelight is looking to raise $201 million. According to the filing, Limelight earned $64.3 million for the year ending December 2006 and reported a loss of $3.7 million.

Limelight has been marching towards the IPO since mid last year when it raised a round of $130 million led by Goldman Sachs Capital Partners and brought on a new CEO Jeffrey Lunsford, who led his former company WebSideStory through a successful IPO.

This is good news for all the companies in the content delivery segment of the market as it will bring additional exposure to the services these companies provide. Also, with Limelight now having to put on paper every quarter all the details of it’s business, it will help to give us a better picture of the entire content delivery market.

I’ve put a call into Limelight to see if they will give a date range of when they expect to go public. Waiting to hear back. The company was not able to provide any estimated date range.

NBC Universal and News Corp. announced today that they are joining forces to launch a new video portal this summer enabling them to better control their programming and give YouTube some competition. It’s about time. What’s taken these major content owners so long?

I like this deal for two major reasons. One, this new video portal will have real syndication in place since they are teaming up with Yahoo, Time Warner Inc.’s AOL, Microsoft Corp.’s MSN, and MySpace as their initial distribution partners. In addition, they are going to focus on producing professional looking content as opposed to most of the junk you see on YouTube. Some have said this new video portal can’t be compared to YouTube since YouTube is all about allowing users to upload their own videos and the new NBC Universal and News Corp. portal has not yet defined what roll user generated content will play.

It’s hard to know how much of YouTube’s traffic comes from user generated video or from TV produced content, but we know that a vast majority of traffic comes from TV content. I mean, how many jackass style videos can you really watch each day?

For me, the outstanding questions about this deal are:

• How will this new NBC Universal and News Corp. portal distribute content? Will they use a firm like Brightcove or try and keep most of the technology in-house? If they don’t have a user generated function, then all they are doing is delivering video which they can easily do. But if they need to have transcoding and other functionality, my guess is they will partner with someone so that they enter the market faster.
• What will be the role of user generated video in the new portal?
• How many other content providers will jump on board with NBC Universal and News Corp. to add their content to this new portal? If it is successful when it launches, many other content owners will quickly want to join.

It seems every time there is a big deal announced people always seem to call it a "game changer" even when the new offering has not yet launched. In most cases, I think it’s a bunch of hype and they use the term simply to create drama, but in this case, I think this announcement really does have the potential to change the economics for some content owners.

Mediapost has a good article on their website today that reviews some of the sessions going on at the OMMA Hollywood conference this week. Specifically, this article talks to how the role of the agency will need to change to keep up with the emerging media planning platforms.

This is not unique to our industry or a media business. This applies to companies in any industry that allow themselves to not embrace change and work with it, instead of against it. The record industry is a great example of an industry that in my opinion has never kept up with or embraced change.